What is the purpose of an inspection contingency?

An inspection contingency is an important element in a real estate transaction, primarily designed to enable the buyer to inspect the property and act on the findings. This contingency allows the buyer the opportunity to conduct a thorough examination of the property's condition, usually through a professional home inspector. If any issues are discovered during this inspection, the buyer has the right to negotiate repairs, request a price reduction, or, in some cases, even back out of the contract altogether.

The significance of this contingency lies in protecting the buyer's interests by ensuring they have a comprehensive understanding of the property's condition before finalizing the sale. This step can prevent potential financial burdens that may arise due to unforeseen problems after closing.

Other options, such as locking in the final sale price or ensuring seller disclosure, do not accurately capture the primary purpose of an inspection contingency. The focus is specifically on giving the buyer the opportunity to evaluate the property's physical state and make informed decisions based on those findings.